Analysis: Medicare Will Account for More Than 10% of GDP by 2083

A new report from the boards of trustees for Medicare and Social Security estimates that the cost of funding Medicare will surpass that of Social Security and eventually account for 11.4 percent of the U.S. Gross Domestic Product.

These results are actually worse than originally anticipated. In 2009, Social Security's trustees estimated that the program's "trust fund" would run out by 2041. Updated figures, however, now indicate that it will run dry by 2037. When that happens, the program won't be bankrupt because it'll still be taking in payroll tax revenues, but it will only be capable of paying out about three-quarters of its funding obligations.

The report cites several reasons for the revised estimate:

• The recent recession lowered tax revenue and slashed the returns of Social Security's investment portfolio
• Gross domestic product growth was revised downward
• People are living longer

Social Security's problems actually pale next to Medicare's. By 2083, it is estimated that a full 11.4 percent of the GDP will be spent on Medicare, nearly twice the amount spent on Social Security.